Wallace Kantai analyses the Grand fiasco

July 12, 2008 12:00 am

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By , NAIROBI, July 12 – On which side of the bed did you wake up last Tuesday? That will determine how you view Amos Kimunya’s resignation from the Finance Ministry. As with anything that touches on politics, economics and personalities, Mr. Kimunya’s resignation (or ‘stepping aside’, if you will) is an affair with rather complex origins and even more complex consequences. So, for now, let’s try and decipher, to the best of our ability and the information at hand, on the saga’s impact on Kenya’s politics and economics.

First, an attempt to unravel the murky beginnings of the Grand Regency saga. Beginnings? Take your pick. Do you want to start where Mohamed Aslam decided to build the Meridian Hotel in the late 1980s? Or would you rather begin when the Goldenberg plot was being hatched in the fertile mind of a young Kamlesh Pattni and the powerful spy Chief, James Kanyotu? Or does your memory only go back a few weeks, to the sickening television spectacle of the grown Pattni, dripping with false piety, ‘giving back’ the lofty hotel to the government (out of the kindness of his heart, of course).

Wherever you begin, the Grand Regency controversy is truly of grand proportions. The short, public version of the story is after Pattni, besides himself with generosity transferred ownership of the hotel to the government, through Mr. Kimunya, it immediately set about looking for a way to dispose of the hotel. The State was apparently unwilling to run a five-star monument to gilded corruption.

The property then, nominally, belonged to the Central Bank of Kenya (CBK), that being the institution that Pattni handed it over to. That obviously brought in the grand personage of the Governor of the CBK, Prof. Njuguna Ndung’u. Then, because this was a land transaction that was worth several billion shillings (how many billions is at the centre of the Kimunya dispute), the Lands Ministry, under the combative James Orengo, threw its hat into the ring. And finally, for whatever indeterminate reason, the National Security Intelligence Service (NSIS), under Maj. Gen. Michael Gichangi, also became involved in the matter.

So, herewith, the pieces of the puzzle (at least some of them anyway). Pattni gives the Grand Regency back to the government. The government immediately seeks to sell it off, and does so to a bunch of Libyans (a private Libyan company? The Libyan Government? We don’t know yet). Howls of protest erupt over the sale itself, over the fact that it was concluded with Libyans, and over the sale price.

First, there were allegations that the sale did not follow proper legal mechanisms where public assets such as the Grand Regency are to be disposed of through a public auction where you, me or any other Kenyan with a few billions to spare can bid for the hotel. The second part of it is that Libyans are not the cleanest set of characters to deal with on a business transaction (though our distaste for them has not stopped them from acquiring Mobil Oil and bidding for the Mombasa refinery). The third complaint is that, even after the government decided to sell off the hotel, and to the Libyans, it got a lousy deal of it, underselling it by many billions.

Whatever the complaint was, Mr. Kimunya was a cornered man. So he went through the multi-step process of a cornered Kenyan public figure. The first step in this (pay attention if you ever intend to have a career in public ‘service’) is bluster. True to form, Mr. Kimunya first claimed that any reports of the Grand Regency’s sale were merely ‘bar rumours’. But, of course, there is much more to a rumour than mere bar talk, especially when the premier exponent of that is a Cabinet colleague, in this case James Orengo.

As Mr. Orengo insisted that the hotel had been sold, and in an underhanded deal at that, Mr. Kimunya undertook the next step, dismissal. He claimed that the deal had been ‘too sweet’ to pass up. This may have worked in a less investigative public mood, but things had moved on beyond that.

Next step was: ‘Yes, the deal may have been slightly fishy, but I wasn’t alone in this’. So Mr. Kimunya invoked everyone’s name, from Mr. Orengo’s, through Maj. Gen Gichangi’s and the Attorney General’s, all the way to the Prime Minister’s (although, curiously not the President’s).

As the furore refused to die down, Parliament decided to get involved. MPs quickly formed a baying mob, out for the Finance Minister’s blood. When complaining did not seem to sate their bloodlust, they went ahead to censure him, and pass a vote of no confidence. By this time, the press and the public had joined the mob eager to see Mr. Kimunya’s back. The curious part about all this is how he had been hung out to dry by his ostensible allies. Party of National Unity (PNU) stalwarts such as Danson Mungatana were first in line castigating Mr. Kimunya, and almost no PNU heavyweight came to his defence.

On the weekend of the 5th of July, things finally came to a head, though we didn’t know it yet. Mr. Kimunya was reportedly reprimanded by the President, though, the next day, he used the last item in his arsenal. He retreated to Kipipiri, his rural constituency, and attempted to recruit his constituents to his side. According to him, if the lynch mob insisted on his head, then ‘watakuwa wakiwatafuta’ (‘they will be targeting you’). Monday the 7th saw the loud cacophony for his resignation continue unabated, until we finally heard of his ‘stepping aside’ on Tuesday.

So, what are the implications of this whole sordid affair?

First, who does the Grand Regency belong to, and why was it sold? The rumour mill is grinding with gay abandon. There are stories of electoral bets being repaid, with people asking us to cast our minds back to the visit the President made to Libya in 2007. There are issues of national security, and the role of the new rapprochement between Libya and the Americans taking centre stage. These, I suppose, will be clarified in due course (the truth always comes out, even if it is only in history books).

Second are the policy implications. We need to remember that this scandal broke in the middle of the budget cycle, when Parliament was busy passing ministerial votes. The seriousness of the matter for policy reasons became apparent when Mr. Kimunya attempted to withdraw money from the Consolidated Fund for governmental operations, only to have this rebuffed until the matter was resolved. Now that he has resigned, it seems Parliamentary affairs may proceed apace.

Another issue is the fact that Mr. Kimunya, since his Lands Ministry days, and through his Finance tenure, has been one of the chief exponents of President Kibaki’s trickle-down economics. His entire policy direction has been top-line growth in the economy – the higher the Gross Domestic Product (GDP) growth numbers the better – which has been a good thing for those benefiting.

But it has been criticised by those who believe that the rising tide is lifting only the big ships, and leaving the little dhows floundering. Mr. Kimunya’s belief in growth numbers was such that, even in the teeth of the post-election violence, when all the trends were pointing downwards, he still believed that we would post 7 percent GDP growth figures.

The elephant in the room, obviously, is the political implications of the resignation. These are on several levels. One, Mr. Kimunya was one of the leading lights in the PNU partnership, and some have speculated that he was abandoned by those in PNU eager to see him removed from the 2012 electoral intrigues. He is now lost to the President in the remaining four-and-a-bit years of his government, and that is a huge hole that needs filling.

The lynch mobs have moved on, and their sights are trained on the Immigration Minister, Otieno Kajwang’, who supposedly awarded work permits under dubious circumstances. Whether he suffers Mr. Kimunya’s fate is yet unclear, but the bloodlust (and maybe PNU’s thirst for revenge) may mean his days are numbered.

Perhaps the most positive thing to come out of this is the fact that, maybe, finally, resignation is becoming one more step in the Kenyan political toolbox. The number of people who should resign from public, and private, office is almost as long as the list of offices they hold. From abuse of office, through corruption, theft, murder; to personal issues such as sexual predilections and a tendency to nepotism; to sheer incompetence; Kenyan office holders often do not acquit themselves honourably. Yet they often choose to bluster their way through problems in the hope that Kenyans will live up to their reputation as a forgetful people. Maybe Mr. Kimunya’s exit will be the first of, hopefully, many.